It’s been more than 18 months since the federal government announced a sharp cap on international student permits, and the ripple effects have begun to hit hard.
Dwindling international student enrolment is hurting the bottom line of universities and colleges throughout the country. For decades, they had been a key financial lifeline because their tuition fees were often at least three times higher than domestic students, thus plugging the hole left by stagnant provincial funding.
In some cases, international tuition provided nearly half of an institution’s revenue. With that model now disrupted, the consequences are increasingly dire. Some universities will scrape by with layoffs and cutbacks. Others, particularly smaller schools, may not survive at all.
While Ottawa and the provinces, which have the constitutional responsibility for education, continue to dither about how to fix this problem, there’s one key step the post-secondary institutions themselves can and should take – create branch campuses in other countries as some foreign universities have done.
Stronger boards can help universities adapt to challenging environments
Branch campuses abroad do not conflict with whatever domestic strategies are possible in Canada. Rather, they would complement them, providing a parallel stream of revenue and reputation-building that domestic subsidies alone cannot achieve.
They would also give Canada new leverage in global education, enhancing soft power and creating pathways for skilled immigration that directly serves our long-term economic needs.
While some assistance from Ottawa and the provinces may be beneficial to the schools in this area, the key is the independent resolve of each individual institution to get this done. That’s what happened with schools in the U.K., Australia and the U.S.
Action with consequences
Unfortunately, the federal government limited international student permits in response to allegations that their previous large number was contributing to the housing affordability crisis and thus rising inflation.
However, when it did this, Ottawa did not offer any tangible solutions or start discussions with the provinces on how universities and colleges are supposed to weather the resulting financial storm.
In addition, the situation in Canada could soon be complicated by the changing global economic environment. The number of international students could drop further as U.S. President Donald Trump’s tariffs abroad weaken the economies of countries where many international students tend to come from.
Malaysia as a starting point
Schools in the U.S., the U.K. and Australia have spent decades building global networks of branch campuses in other countries so that students don’t have to leave their homes to get a Western higher education.
However, Canada has remained strikingly absent in this arena. That is no longer just embarrassing, it is an existential threat given the current crisis.
As a starting point, Canadian schools should consider Malaysia. The country has positioned itself as an international education hub, welcoming foreign universities with clear regulatory frameworks and government incentives since the 1990s. English is widely used, operational costs are far lower than in Canada and demand from ASEAN, South Asian and Middle Eastern countries continues to rise.
Australia’s Monash University and the U.K.’s University of Nottingham are two of the established players thriving there, offering degrees identical to those in their home countries at a fraction of the cost while also feeding students into their graduate programs.
These branch campuses offer a new source of revenue, enhance international reputation and strengthen research collaboration between the host and the provider country.
Inaction is a greater risk
Canadian universities could do the same – but only if they act fast. Other non-Western universities, such as those from China and Japan, are rapidly entering this arena.
The risk of inaction is obvious. Our dependence on international student tuition was a structural weakness – one that our competitors foresaw many decades ago, when they faced a similar environment of decreased public funding amid an uncertain global economic outlook.
It’s thus very clear. Unless Canadian institutions expand beyond our borders, they will continue to be forced to manage decline while those in other countries prosper.
Of course, opening branch campuses abroad is not without risk. Quality assurance, cultural adaptation and financial sustainability all require careful planning.
Canada does not, however, have to be alone in this venture. Indeed, notwithstanding the existing, mature frameworks of collaboration already in place in host countries, academic resources that include management experiences of universities operating branch campuses are also available as possible blueprints for operational consideration.
The real problem is the far greater risk of refusing to take the initial step. If even a handful of Canadian schools later face financial troubles because they didn’t expand abroad, the consequences for our economy, workforce and global reputation will be far worse than the challenges of expansion.
The bottom line is this: the era of easy money from international students coming to Canada is over. Our universities can either cling to a dying model or take the bold step of going where the students are. Canada needs to hurry up because it’s already late to the race.
This article draws on research from the author’s undergraduate work under the guidance of political science professor David Matijasevich. The work focuses on international education policy with a particular focus on Canadian universities and global competition.
